Israeli soldiers have killed a Palestinian man the military had accused of shooting dead an Israeli rabbi, after an exchange of gunfire in the occupied West Bank.

Mohamed Fakih, 29, died on Tuesday after a shootout in the village of Surif, which is north of the West Bank Hebron city of more than 200,000 Palestinians.

"During the operation to stop Mohamed Fakih, who carried out the attack, he was killed during an exchange of fire with soldiers," a statement from the army said, which described as him as "terrorist" who "assassinated" Rabbi Michael Mark earlier in July.

The 48-year-old rabbi was killed and three members of his family were injured this month when the suspect opened fire on his car, south of Hebron.

House demolished

Hamas, the Palestinian group, said the slain Palestinian man was a member of its military wing, the al-Qassam Brigades.

The house in which Fakih was hiding out was damaged during the fighting and then demolished by an Israeli bulldozer, Reuters news agency reported.

Three others were arrested during the raid.

An Israeli army spokesperson said that a Palestinian woman sustained minor wounds during the military attack and was taken to a hospital for treatment.

The Palestinian Maan news agency quoted the spokesperson as saying that a Kalashnikov machine-gun and a grenade were found in Fakih's house.

Witnesses told the news agency they saw Fakih's body in the bucket of an Israeli army bulldozer that pulled him out of the rubble.

Maan reported, citing the Palestinian Ministry of Health, that five Palestinians were shot with rubber-coated bullets during clashes in Surif.

Tightly guarded enclave

Hebron, occupied by several hundred Jewish settlers who live in a tightly guarded enclave in the heart of the city, has been a persistent source of tensions.

"When we talk about Hebron, it really is a microcosm of this conflict," our correspondent said.

"It is an area in the occupied West Bank where settlers live very closely together with Palestinians ... It's patrolled very tightly by the army. Palestinians will tell you they have no freedom of movement."

Elsewhere in the Palestinian territories, reports said that the Israeli Defence Forces shot and wounded an 18-year-old Palestinian woman at Qalandiya checkpoint on Tuesday.

Images and video posted to social media showed the teenager having fallen to the ground after the attack, as she wailed in pain.

Qalandiya is the main checkpoint between the northern West Bank and Jerusalem.

Police said she failed to "respond to the calls of the Israeli security personnel", adding that they had found a knife in her belongings, according to the Haaretz newspaper.

Violence in the Palestinian territories and Israel since last October has killed at least 217 Palestinians, 34 Israelis, two Americans, an Eritrean and a Sudanese, according to an AFP count.

Most of the Palestinians killed were suspected of carrying out knife, gun or car-ramming attacks, according to Israeli authorities.